In What Type of Market Does the iPod Operate In?

According to the article, it states that Apple’s lineup of media players belong to an Oligopoly market structure, with Apple being one of the few, big dominant players, owning about 74% market share. In an Oligopoly market structure, we can frequently see:

1. Periods of intense price competitions

2. Heavy investment in development

3. Patented technologies

4. Emphasis on non-price competition

5. The existence of exit and entry barriers

Apple’s iPods are in an Oligopoly market structure because there is a combination of big business firms and independent companies that compete. In other types of market structures, like Monopoly, there would only be one, clearly dominant contender, while in Perfect Competition, there would only exist many independent establishments; in an Monopolistic competition, only few large firms would compete, and there would be no small institutions. Apple’s iPods are clearly dominant players in this market, however, it is doubtful the existence of the new iPhone will completely annihilate their distant cousins. Indeed, Apple is make a bold move, shifting towards the cell phone market, with big competition like Nokia and Blackberry; however, business is all bout taking risks, and it is hopeful much can be benefited. Nonetheless,the iPhone will still not eliminate its distant iPod cousin, because there is a balance in price and memory and a countless number of other factors, the iPod will absolutely live on well beyond ten years.